RECAP

An acceleration clause or acceleration covenant in the law of contracts, is a term that fully matures the performance due from a party upon a
breach of the contract. Such clauses are most prevalent in mortgages and similar contracts to purchase real estate in installments.
Tolentino v. Gonzales Sy Chiam.

The transaction was one of rent and not a loan. The property in question was sold absolutely with the right only to repurchase. During the period of
redemption, vendee and not vendor was the owner of the property.
Dissent (Malcolm): The contract was merely a clever device to cover up the payment of usurious interest.
Pajuyo v. CA. Precarium is a contract by which the owner of a thing, at the request of another person, gives the latter the thing for use as long as the
owner shall please. || CA held that the contract was a commodatum. SC: there is actually a consideration, the agreement was not gratuitous. The
consideration is the obligation to safekeep. Even if it were a commodatum, bailee nevertheless has the duty to return possession to bailor.
People v. Puig. The Bank acquirres ownership of the money deposited by its clients; and the employees of the Bank, who are entrusted with the
possession of money of the bank due to the confidence reposed in them, occupy positions of confidence. || The relationship between depositor and
Bank is that of a creditor-debtor.
Pantaleon v. American Express. Credit card company was not liable to pay damages in this case because the period of time it took to send its
approval was justified. || The use of a credit card to pay for a purchase is only an offer to the credit card company to enter a loan agreement with the
credit card holder. Before the credit card issuer accepts this offer, no obligation relating to the loan agreement exists between them. || In fact,
credit card application forms typically contain terms stating that the credit card company reserves the right to deny authorization for any requested
charge.|| There is no provision in the (credit card) agreement that obligates (the credit card company) to act on all cardholder purchase
requests within a specifically defined period of time.
Jardenil v. Salas. The payment of interest must be expressly stipulated. The court must not impose an obligation that the parties have not chosen to
agree upon. The act of the mortgagee of granting to the mortgagor on the deed of mortgage an extension of one year from the date of maturity to make
the payment without making any mention of any interest which the mortgagor should pay during the additional period indicates the true intention of the
parties that not

interest should be paid during the period of grace.

Cu Unjieng v. Mabalacat. The provision merely requires the debtor to pay interest monthly at the end of each month, such interest to be computed
upon the capital of the loan already paid. It does not justify the charging of compound interest accruing upon the capital monthly.
GSIS v. CA. It has already been settled that the Usury Law applies only to interest by way of compensation for the use or forbearance of money. || The
Civil Code, However, permits the agreement upon a penalty apart from the interest.
Ligutan v. CA.
Tan v. CA. Under A1959, the compounding of not only the monetary interest but also the penalty charge is allowed. Hence, the borrower may be held
liable to pay the interest on the total amount of principal, the monetary interest and the penalty interest.
RCBC v. CA.The charging of interest for loans forms a very essential and fundamental element of the banking business, which may truly be
considered to be at the very core of its existence or being. It is inconceivable for a bank to grant loans for which it will not charge any interest at all
Eastern Shipping v. CA. I. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or quasi-delicts 18 is breached, the
contravenor can be held liable for damages. 19 The provisions under Title XVIII on "Damages" of the Civil Code govern in determining the measure of
recoverable damages.
II. With regard particularly to an award of interest in the concept of actual and compensatory damages, the rate of interest, as well as the accrual
thereof, is imposed, as follows:
1.

When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that
which may have been stipulated in writing. 21 Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. 22 In
the absence of stipulation, the rate of interest shall be 12% per annum to be computed from default, i.e., from judicial or extrajudicial demand under
and subject to the provisions of Article 1169 23 of the Civil Code.

2.

When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at
the discretion of the court 24 at the rate of 6% per annum. 25 No interest, however, shall be adjudged on unliquidated claims or damages except when
or until the demand can be established with reasonable certainty. 26 Accordingly, where the demand is established with reasonable certainty, the
interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so
reasonably established at the time the demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which
time the quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall,
in any case, be on the amount finally adjudged.

3.

When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under
paragraph 1 or paragraph 2, above, shall be 12% per annum from such finality until its satisfaction, this interim period being deemed to be by then an
equivalent to a forbearance of credit.
First Fil-Sin Lending v. Padillo. The interest on the loans is per annum as expressly stated in the promissory notes and disclosures statements. The
provisions as to annual interest is clear and requires no room for interpretation.